By Susan Dunlap

Posted August 15, 2024

 

A nonprofit group released data showing how much taxes migrants pay in the U.S. as rhetoric on immigration grows more prominent just months from election day.

 

The Institute on Taxation and Economic Policies is a nonprofit, nonpartisan tax policy organization. The Institute’s report, Tax Payments by Undocumented Immigrants, shows that in 2022, those who work without documentation paid $96.7 billion in federal, state and local taxes.

 

Jacob Vigil, deputy policy director for New Mexico Voices for Children, told NM Political Report that migrant workers not only pay taxes but are left out of most government benefits due to a rhetoric built on exclusion and “real misunderstandings immigrants make to the public sector and public finances.”

 

“Plus, the economic impact of their presence in the workforce,” he said.

 

In New Mexico, undocumented migrant workers paid $153.8 million in state and local taxes in 2022. NMVC said, in a news release, that the figure would increase to $174.1 million if undocumented migrant workers were allowed work authorization. That estimation factors in the likelihood that immigrant worker salaries would improve if they are allowed work authorization.

 

They’re living paycheck to paycheck, supporting a family, they should not be shouldering the tax burden.”
Jacob Vigil, New Mexico Voices for Children

 

Vigil noted that in New Mexico, there were efforts during the COVID-19 pandemic to institute pilot programs to extend some benefits, such as the state’s child tax credit. A bill enacted by the state in 2021 expanded the Working Families Tax Credit.

 

While that helped undocumented workers, they are still left out of federal relief tax programs and other federal and state benefits, including Social Security and Medicare.

 

Undocumented workers are eligible to apply for an Individual Taxpayer Identification Number, according to the Immigrant Legal Resource Center. If an individual receives an income in the U.S., regardless of status, they must pay taxes on that income.

 

Immigrants are incentivized to obtain an ITIN. While having it and paying taxes does not equate to work authorization or legal status, a migrant who fails to obtain an ITIN and pay taxes would receive a negative factor during future immigration proceedings, according to ILRC.

 

Vigil said some data is striking. Nationally, undocumented workers provide an average of $8,900 per person for public services in 2022.

 

Vigil said migrant workers make up a considerable portion of New Mexico’s workforce and, in addition to income taxes, they also pay gross receipts tax on most goods and services, excise taxes which are levied on items such as cigarettes, alcohol, betting, soda and amusement activities. They also pay property taxes either through home ownership or through rent when the property tax is passed along to the tenant.

 

Vigil said there are approximately 61,000 undocumented workers in New Mexico and they provide employment in critical industries such as agriculture and oil and gas.

 

“We have advocacy partners who work with workers in the Permian Basin and those jobs are really some of the most dangerous and insecure. There is a high level of accidents and injuries that happen,” Vigil said.

 

He also noted that much of the state’s revenue is reliant on the extractive field.

 

“Undocumented workers play a huge role in that sector,” he said.

 

Vigil said that, in addition to an expansion of tax credits, there should be efforts to better support the workforce in those industries to ensure they are safe and supported and that there should be workforce training for post-fossil fuel jobs.

 

“There are ways those jobs can be more stable and higher paying and where there’s access to more diverse training programs,” he said.

 

Other industries where undocumented workers tend to fill gaps are in the restaurant industry and in healthcare, Vigil said.

 

Undocumented workers also pay more, per average, in state and local taxes than the top 1 percent of households in New Mexico and 39 other states. That’s because the taxes, including GRT, excise, property and income taxes, all amount to a higher percentage of an undocumented worker’s income, Vigil said.

 

Vigil said those in the top one percent receive tax deductions for things such as capital gains tax, which enables them to pay a lower effective tax rate.

 

“What we mean when we say our tax code is regressive, it doesn’t mean [undocumented workers] are paying more than the top one percent. What they’re paying is a bigger percentage of their income,” Vigil said.

 

Vigil said GRT and income taxes weigh the heaviest of those who are at the lowest 40 percent to 60 percent of earners because the tax consumes a higher percentage of their incomes.

 

Vigil said a just and fair tax system would raise revenue on higher earners.

 

Those in the lower income brackets, including undocumented workers, “don’t have large assets to draw from in the case of an emergency,” he said.

 

“They’re living paycheck to paycheck, supporting a family, they should not be shouldering the tax burden,” Vigil said.

 

Susan Dunlap is a Reporter with New Mexico Political Report. This article was originally published by New Mexico Political Report.